By Daniel Chacon, Santa Fe New Mexican
December 6, 2024
The New Mexico State Land Office is still on a roll although its earnings were down slightly in fiscal year 2024 after setting records in the two years previous.
The agency that leases state trust land pulled in $2.56 billion in fiscal year 2024 after earning a record $2.75 billion the previous fiscal year and a record $2.4 billion in fiscal year 2022.
But what State Land Commissioner Stephanie Garcia Richard and her team are most proud of: The office collected a record $214 million in fiscal 2024 for activities other than oil and gas royalties.
“We’ve aimed to diversify our revenue-earning activities at every turn, and we are starting to see real results,” she said in a statement.
“Obviously, it’s much smaller proportional to the oil and gas royalties,” agency spokesperson Joey Keefe said. “But I think the thing that we’re really celebrating here is the fact that that commitment to diversification is actually starting to bear some fruit in the numbers.”
Money raised from the leases and royalties for oil and gas production, grazing, renewable energy and other purposes supports New Mexico’s public schools, universities and hospitals. Public schools are the biggest beneficiary, receiving about 85% of the revenue the agency generates.
“As a former teacher, I know the value of every cent we can put into our classrooms,” Garcia Richard said Thursday in a statement.
“We’re proud that we’re once again bringing in billions from activities on state lands to make a difference for our kids in the long run,” she said.
Earnings topped $1 billion for the first time in 2019. The revenue generated in fiscal year 2023 remains the all-time record.
Keefe said the conflict in Ukraine contributed to the record revenue generated that fiscal year.
“The price of a barrel of oil started going up in 2022, but we really saw a spike in 2023, so we think that’s the biggest reason why our royalty numbers were so huge that year,” he said.
Overall, the State Land Office has earned more than $11 billion since Garcia Richard took office in 2019, according to the news release.
“This revenue keeps our public institutions running while keeping money in the pockets of New Mexico’s taxpayers,” Garcia Richard said.
The State Land Office estimates it saves the average New Mexico taxpayer $2,800 annually through its earnings.
Garcia Richard vowed to continue working to make as much money for schools as possible, “including pushing the Legislature to raise the state’s inadequate oil and gas royalty rate.”
After a bill to raise the top royalty rate from 20% to 25% died in the Legislature during the 30-day session earlier this year, Garcia Richard decided not to lease some of the state’s most valuable tracts of land for oil and natural gas development in the Permian Basin until lawmakers take action.
The moratorium remains in effect.
“She’s held firm on that, and she’s still not going to lease those tracts until or unless the Legislature raises the rate for those top tracks to 25%,” Keefe said, adding Garcia Richard will make another push during the upcoming legislative session in January.
“We haven’t figured out who is actually going to be the sponsor yet this year, but that legislation will be in the [2025] session again,” he said.
The higher royalty rates would generate an additional $50 million to $80 million a year, Keefe said.
“It would bring in a billion dollars overall over the lifetime,” he said.
This article originally appeared in the Santa Fe New Mexican.